142 F. Supp. 3d 755
E.D. Wis.2015Background
- CG Schmidt, Inc. (CGS) solicited bids and selected Permasteelisa North America (PNA) to furnish, fabricate, and install a unitized curtainwall for a large Milwaukee mixed‑use project; negotiations ran from April 2013 to June 2014.
- CGS provided its bid manual and standard subcontract form (which stated a signed, integrated subcontract would supersede prior bids/negotiations); PNA submitted a detailed bid and later revised proposals and drawings.
- Parties repeatedly negotiated price, scope, liability and liquidated‑damages language; CGS and PNA exchanged letters of intent (LOIs) and draft subcontracts but never executed a final subcontract.
- PNA sought an executed contract or LOI before proceeding with significant work (e.g., shop drawings); CGS and PNA acknowledged the owner’s prime contract and GMPA had to be in place before a subcontract could be signed.
- In June 2014 PNA disengaged, citing production capacity problems (civil unrest affecting overseas fabrication); CGS hired a replacement subcontractor and sued for breach of contract and promissory estoppel.
- The court granted PNA summary judgment, finding no binding contract was formed and promissory estoppel failed because reliance was unreasonable and no demonstrable detriment was shown.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a binding contract formed despite no signed subcontract | PNA’s bid, award, LOIs, updated proposals, and parties’ conduct manifested agreement under the UCC | Parties intended to be bound only by a later executed, integrated subcontract; no signed subcontract => no binding obligation | No contract; parties intended an integrated signed subcontract and never manifested objective intent to be bound earlier |
| Whether LOIs (Feb/May) created enforceable obligations | LOIs fixed price/scope and were accepted by conduct/silence | LOIs expressly stated intent to enter a later subcontract that would supersede prior negotiations; not intended as final | LOIs were not binding; their language and surrounding negotiations show they anticipated a later signed subcontract |
| Whether parties’ conduct (kick‑off meetings, drawings, exchanges) created a contract under UCC §2‑204 | Plaintiff: conduct recognizing the contract (meetings, drawings, samples) shows acceptance | Defendant: conduct occurred during ongoing negotiations and expressly conditioned on a signed subcontract and prime contract/GMPA | Conduct did not establish a contract; parties consistently treated the relationship as contingent on a signed subcontract and owner approvals |
| Whether promissory estoppel applies | Plaintiff: PNA’s bid and conduct induced reasonable reliance, causing damages when PNA disengaged | Defendant: reliance was commercially unreasonable given ongoing negotiations, contingencies, and no demonstrated detrimental reliance or injustice | Promissory estoppel fails: reliance was unreasonable, no clear detrimental reliance shown, and justice does not require enforcement |
Key Cases Cited
- Linden v. Cascade Stone Co., 283 Wis.2d 606 (Wis. 2005) (use predominant‑purpose test to decide whether UCC governs mixed goods/services contract)
- Skycom Corp. v. Telstar Corp., 813 F.2d 810 (7th Cir. 1987) (intent to be bound is objective; summary judgment appropriate where shared expressions are undisputed)
- Gruen Indus., Inc. v. Biller, 608 F.2d 274 (7th Cir. 1979) (no contract where parties understood a formal written document would be prerequisite to being bound)
- Associated Milk Producers, Inc. v. Meadow Gold Dairies, Inc., 27 F.3d 268 (7th Cir. 1994) (parties’ conduct can create a contract under UCC when shipments/acceptance show objective intent)
- Hotel 71 Mezz Lender LLC v. Nat. Ret. Fund, 778 F.3d 593 (7th Cir. 2015) (summary judgment standards; draw inferences for nonmovant)